The latest reports from the auditor general of Pakistan (AGP) for FY2022-23 reveal a deeply alarming state of governance in Punjab and Sindh. These documents echo the rising concerns regarding corruption recently highlighted by Transparency International.
The identified malpractices range from simple fraud to actions that are both morally abhorrent and legally prosecutable. One category of fraud involves systematically overpaying contractors for goods and services. This is rent extraction in its most direct form: a mechanism for converting public wealth into private benefit for those with the right connections.
A second type of fraud involves public servants misappropriating idle government funds by diverting them into commercial bank accounts. When projects stall, whether for genuine or contrived reasons, money earmarked for public use sits unutilised. In such cases, departmental authorities collude with commercial bankers to park these funds in accounts that generate mark-up kept entirely off official ledgers. The State Bank of Pakistan’s regulations do not prohibit commercial banks from accepting such deposits, a significant lacuna that enables this form of institutionalised skimming. A public office is quietly converted into a private revenue stream.
A particularly heinous category of malfeasance, and a point of unmistakable moral failure, is often found in the public hospitals’ pharmacies. This is due to the purchase of expired or substandard medicines for public hospitals that serve mainly the poorest and most vulnerable. This constitutes criminal recklessness and endangerment to human life. It endangers lives, exploits the vulnerable and effectively weaponises poverty against those who suffer it most.
The AGP’s report, constrained by its own conventions, reaches for anodyne language such as “procurement of substandard medicines reflected weak internal control and poor performance of the procurement department”. Or: “Audit is of the view that due to non-reflection of expiry date of medicines in the ERP (‘Enterprise Resource Planning’) system, the quality and efficacy of medicines was questionable”.
Procuring defective medicines isn’t due to poor inventory management or computer error – this is a deliberate act of medical homicide. The officials who purchase substandard medicines or bypass tests conducted by the government’s Drug Testing Laboratories (DTL) know mothers will watch children die from infections that functional antibiotics would cure. They know diabetics will sicken from ineffective insulin. They know TB patients will remain infectious while believing they’re being treated.
Perhaps the most insidious and damnable finding in the audit reports is that the Provincial Disaster Management Authorities (PDMAs) did not often have records of how money meant for flood victims was spent and/or names of recipients. For instance, Rs1.16 billion was released by the Provincial Disaster Management Authority (PDMA), Punjab, to various District Disaster Management Authorities (DDMAs) without any subsequent reconciliation. The audit faults the Punjab PDMA for failing to obtain expenditure statements or details of the relief assets purchased and distributed by the districts.
In Sindh, the audit found that the government purchased tents for flood victims at higher than normal market rates, resulting in a financial loss of Rs1.8 billion. Similarly, there was a loss of Rs170.3 million from the purchase of high-cost ration bags.
In one district in Sindh, a deputy commissioner drew Rs44.8 million in cash through open cheques. The record provided to show how this money was utilised was deemed “unauthentic and non-verifiable” by the audit. Diverting or misusing funds meant for flood victims or other disaster-affected populations is not ordinary corruption. It is ‘Catastrophic Predation’. It deepens suffering, delays critical aid, and can directly lead to hunger, disease and death.
Yet the audit reports, boxed in by their own reporting conventions, categorise these actions as a “loss to the government”, “suspected misappropriation”, and “unverifiable expenditure”. There is no mention of the human misery and suffering, including death and long-term harm to children, that such actions cause because the victims are excluded from the discussion.
The reports also document recruitment irregularities and wasteful expenditure too numerous to catalogue in a single column. Among the more surreal examples: the management of one Punjab institution procured two air fluidised therapy beds for Rs29.9 million, intending them for a hospital. However, when the beds were delivered, the hospital’s management informed the head office that they had never demanded or requisitioned them, as they did not even have a proper burn care unit to utilise such equipment. As a result of this procurement without need or demand, the expensive beds ended up sitting unutilised in the institution’s store.
One obvious inference from all of this is that Pakistan’s social sector spending is even lower in practice than official budget figures suggest due to routine corruption. It is not surprising, then, that Pakistan continues to occupy the lower rungs of the UNDP’s Human Development Index. The connection between bad governance and underdevelopment is not theoretical – the AGP reports give it concrete, documented form.
In essence, the audit reports portray a governance environment in which compliance with rules is deemed optional. The consistent failure to implement effective controls is an open invitation to misuse and fraud, leaving public resources vulnerable, while the failure of oversight bodies (like the Departmental Accounting Committees or DACs) means that the cycle of irregularity is rarely broken.
Weak internal controls are cited repeatedly as the cause of ‘irregularities’ across various departments and sectors. The recurrence of these ‘irregularities’ despite being pointed out in earlier audits indicates that there is no real accountability in government and an entrenched ‘business as usual’ culture prevails.
In both provinces, Principal Accounting Officers (PAOs) frequently fail to convene DAC meetings despite repeated requests from the AGP’s staff, delaying or outright halting the resolution of audit observations. The problems are often compounded by willful non-production and/or non-maintenance of financial records. (Five entities/organisations in Sindh explicitly refused to get their accounts audited by government auditors and/or failed to provide the required auditable records).
The deepest indictment in these reports, however, is not of a failure of internal controls but of civic responsibility.
Persistent poor governance alienates citizens from the state itself. When people see the apparatus of government as indifferent or actively predatory toward their wellbeing, they become more susceptible to nihilistic and extremist ideologies. Their sense of belonging, of being part of a functioning social compact, is corroded. The Arab Spring of 2011, the rise of Boko Haram in Nigeria and the civil war in South Sudan have roots, among other causes, in precisely this breakdown.
The current AGP reporting style unintentionally acts as a shield for corrupt interests. Lumping all misconduct under bureaucratic language allows officials to claim a false moral equivalence: ‘Everyone is doing it’. Crucially, it exhausts public outrage by making corruption seem both ubiquitous and ultimately trivial.
Future AGP reports must adopt a different approach. Misconduct should be classified by its moral gravity rather than just its financial cost. The AGP should differentiate between administrative self-dealing and catastrophic predation. Reports must also include legal opinions on whether a case warrants administrative discipline, criminal prosecution or enhanced penalties like asset seizure.
Pakistan cannot afford to gloss over these AGP reports by cursorily noting their findings in attention-grabbing newspaper headlines and then moving on. Reversing poor governance is a precondition for building an economy that can flourish in the twenty-first century.
One minor recommendation, as part of consciousness-raising, is that these annual reports be included in the course curricula at the Civil Services Academy and the National Defence College.
The writer is a group director at the Jang Group. He can be reached at: [email protected]
